Fact Pattern 18-2
General Leasing Company (GLC) buys equipment for use as inventory, borrow¬ing $1 million from Helpful Finance Corporation for a security in¬terest in the equipment. The next day, GLC borrows $513,000 from Interstate Bank, also for a security interest in the equipment. GLC defaults on the loans.
-Refer to Fact Pattern 18-2.Suppose that two weeks after GLC takes possession of the equipment,Helpful and Interstate file financing statements,with Interstate filing first.In that circumstance,the party with priority to the equipment is
A)GLC.
B)Helpful and Interstate proportionately.
C)Helpful only.
D)Interstate only.

Question

Quizplus · Accepted Answer

Under the rule of first-to-file, the party who files their financing statement first has priority over later filers. In this case, Interstate filed first, so they have priority over Helpful and GLC. Therefore, Interstate has priority to the equipment.

Fact Pattern 18-2 General Leasing Company (GLC) Buys Equipment for Use as Inventory